Managerial Accounting

Garcia's break-even point next year will be $420,000 in sales dollar. This means that the company must generate at least this amount in sales revenue in order to cover their fixed expenses of $300,000 and their variable expenses of $120,000 for a total of $420,000. Any revenue that the company generates above the break-even point will be the company's profit.

$384,000

Variable expenses refer to costs that change in proportion to the
Volume of goods and services produced by a company. Examples include the cost of raw materials, packaging, and labor required to make a product, or the cost of labor for services rendered. In Garcia Veterinary Clinic's case, variable expenses could include the cost of supplies needed for each specific treatment, medications, operational costs for clinics, veterinarian salaries and wages, etc.